nep-geo New Economics Papers
on Economic Geography
Issue of 2022‒09‒26
eight papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Entrepreneurship in the long-run: Empirical evidence and historical mechanisms By Michael Fritsch; Michael Wyrwich
  2. Preparing a multi-country, sub-national CGE model: EuroTERM including Ukraine By Glyn Wittwer
  3. Functional Specialisation in EU Value Chains: Methods for Identifying EU Countries’ Roles in International Production Networks By Aleksandra Kordalska; Magdalena Olczyk; Roman Stöllinger; Zuzana Zavarská
  4. Policies for resilient local economies By Wessel Vermeulen
  5. Diversifying Hawai‘i’s specialized economy: A spatial economic perspective By Steven Bond-Smith
  6. Surviving Pandemics: The Role of Spillovers By Meghana Ayyagari; Yuxi Cheng; Ariel Weinberger
  7. Resiliencia económica en Argentina: recuperabilidad y perfiles de especialización de las áreas económicas locales (1996-2015) By Otegui Banno, Santiago; Calá, Carla Daniela; Belmartino, Andrea
  8. Das Gründungsgeschehen in den Kreisen und kreisfreien Städten: Was zeichnet erfolgreiche Gründungsökosysteme aus? By Kay, Rosemarie; Kranzusch, Peter; Nielen, Sebastian; Suprinovič, Olga

  1. By: Michael Fritsch; Michael Wyrwich
    Abstract: We review and discuss research on the development of regional entrepreneurship over time. A particular focus is on the long-term persistence of regional levels of entrepreneurship, its explanation, and its meaning for economic development. What is the state of empirical research in this field, and what can explain the empirical findings? How are long-term trends of entrepreneurial activity linked to regional performance in terms of employment, gross domestic product (GDP), and innovative activity? Based on our assessments we derive conclusions for theory, policy implications, and avenues for further research.
    Keywords: Entrepreneurship, self-employment, regional growth, entrepreneurial culture, historical analysis
    JEL: L26 M13 O1 O33 R11
    Date: 2022–08
  2. By: Glyn Wittwer
    Abstract: This paper describes the preparation of a database that identifies 74 industries in each of 328 regions in 40 countries, predominantly in Europe. The data are configured to support EuroTERM models of Europe at user chosen levels of industry and regional disaggregation. The TERM (The Enormous Regional Model) methodology has been applied to many countries over the past two decades to model sub-national regional impacts of policy scenarios. The methodology does not rely on sub-national regional input-output tables. Instead, estimates of regional activity shares are used to split a national CGE database into regions. Activity shares are based on industry by region employment numbers extracted from census data, regional agricultural and mining activity data and international trade data by port. EuroTERM provides an example of extending the TERM methodology. First, the GTAP master database is aggregated for non-European nations while keeping European nations plus Ukraine, Russia, Moldova (proxied by Rest of Eastern Europe), Belarus, Georgia, Albania, Iran, Turkey and North Africa represented separately. The database is reconfigured to 40 individual CGE databases. Using NUTS2 data and regional data for the oblasts of Ukraine, regional shares are estimated. Eurostats is the main source of these data. Regional shares provide the basis for splitting 24 European CGE databases to the NUTS-2 level and Ukraine to oblasts. The other nations in the database remain as single country regions. Industry cost structures or technologies are based on GTAP data for each nation. This approach differs from single-nation TERM, in which a single industry technology applies to each region. The methodology used to estimate inter-regional trades in TERM has been modified to accommodate matrices of known international trades from GTAP, while splitting origins and destinations into sub-national regions. Port activity data also contribute to estimation of subnational trade matrices. Electricity Global data on power plants by location have contributed to a split of electricity into 9 generating sectors plus distribution. The war in Ukraine has provided motivation for adding Ukraine, represented by 24 oblasts plus Kyiv city. The EuroTERM master database at present includes 74 sectors in 328 regions. A prototype 438 region GlobeTERM model, including virtually all regions in the GTAP master database, has also been developed as part of the project.
    Keywords: regional economics, Europe, global analysis
    JEL: C68 R10 R11 R15
    Date: 2022–08
  3. By: Aleksandra Kordalska; Magdalena Olczyk; Roman Stöllinger (The Vienna Institute for International Economic Studies, wiiw); Zuzana Zavarská (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Geographically dispersed production networks have allowed countries to specialise in different functions of the value chain. By making use of two methodologies for quantifying the magnitude of functional specialisation – one based on trade flows and one based on FDI flows – detailed profiles of the functional specialisations of EU member states are identified. The analyses are conducted at the country, industry and regional level. In line with the existing literature, they reveal that EU-CEE countries are predominantly specialised in the fabrication stage, that is, they serve as ‘factory economies’, while the Western EU countries are mainly performing knowledge-intensive pre-fabrication activities – a characteristic of ‘headquarter economies’. This dualism within the EU is confirmed by a cluster analysis. While functional specialisation patterns tend to be persistent, especially in the fabrication stage, there are also some signs of functional diversification in EU-CEE countries in more recent years. Still, these functional changes remain limited to a few industries. The dichotomy of factory and headquarter economies is also clearly discernible at the regional level. However, the fact that in most EU countries – mainly in the capital regions – there are some headquarter-type regions implies that a complete functional ‘lock-in’ in fabrication is less likely than suggested by the country-level patterns. Hence, while the results point towards major difficulties of functional diversification beyond the fabrication stage in the EU-CEE countries and regions, there are also several promising elements and trends discernible, in particular at the industry and the regional level.
    Keywords: functional specialisation, global value chains, smile curve, factory economy, greenfield FDI
    JEL: F15 F21 F23 F60
    Date: 2022–08
  4. By: Wessel Vermeulen
    Abstract: The COVID-19 pandemic has critically tested OECD economies, with major differences in economic repercussions at the subnational level. The pandemic can be characterised as a combination of shocks to local economies: (i) a recession, (ii) a supply-side shock mirroring a natural disaster, and (iii) the economic and workplace adjustments accelerated by pre-existing megatrends (e.g. automation, green transition). This paper reviews the empirical evidence for effective policies from across the OECD to strengthen local economic resilience through support for people, firms and places. There is a strong need for effective policies in times of recessions, natural disasters and long-term structural change. Policies that strengthen economic resilience strongly overlap with policies for local productivity growth and vice-versa. Moreover, some policies aiming to increase resilience through adding redundancy in production or infrastructure can serve productivity in the long-term.
    Keywords: COVID-19, economic shocks, industrial change, megatrends, recessions, regional economic resilience, regional economic systems, subnational economic policy
    JEL: R1 R11 R5 R58
    Date: 2022–09–07
  5. By: Steven Bond-Smith (UHERO, University of Hawai'i at Manoa)
    Abstract: Specialization in tourism exposes the economy of Hawai‘i to external shocks that trigger collapses in tourist numbers. Furthermore, Hawai‘i’s economic growth has diminished for decades as the dominance of tourism has not generated productivity growth. In response, policy-makers in Hawai‘i increasingly emphasize diversification. This article examines a spatial economics perspective to explain why Hawai‘i is so specialized and to sketch policy for diversification and growth. Isolated, small, and open economies tend to be more specialized in one or a few industries because increasing returns to scale generates a coordination problem for new industries. By targeting industries that use related know-how or a Hawai‘i-specific resource, Hawai‘i can access productivity gains from the scale of related and location-bound industries.
    Keywords: Economic growth, diversification, related variety
    JEL: R11 R12
    Date: 2022–08
  6. By: Meghana Ayyagari; Yuxi Cheng; Ariel Weinberger
    Abstract: What role do spillover effects play in firm resilience during crises? Using high-frequency data on over 7 million import transactions, we ask this question in the context of the large trade disruption faced by US importers in the months immediately following the initial COVID-19 shock. While US firms saw a reduction in imports due to Covid-related trade disruptions to their suppliers, these effects were lower for importers in counties that received greater loans under the Paycheck Protection Program (PPP), a government stimulus program aimed at small businesses. A one standard deviation increase in exposure to PPP reduces the effect of the supply shock faced by the firm by approximately one-fifth. These effects exist even when the importer is not a direct recipient of PPP loans. The effects are largest in counties with larger number of small suppliers and higher input-output industry linkages, and those with greater share of small and medium enterprises (SMEs). We also see similar effects of PPP preserving job growth at the county level even as the trade shock takes a negative toll on local employment. Our results point to local spillovers between SMEs that were PPP recipients and large importers as being an important determinant of firm resiliency during the pandemic.
    Keywords: agglomeration spillovers, Paycheck Protection Program, supply chains, Covid-19
    JEL: G30 H81 R10 R12
    Date: 2022
  7. By: Otegui Banno, Santiago; Calá, Carla Daniela; Belmartino, Andrea
    Abstract: El objetivo del trabajo es analizar la capacidad de recuperación del empleo en las principales 85 áreas económicas locales (AEL) de la Argentina y vincularla con el tipo de especialización regional, en los períodos expansivos de 2002-2008 y 2009-2015. Para ello, se utiliza una metodología de carácter descriptivo (prueba de suma de rangos de Kruskal-Wallis) y se emplean datos oficiales del total del empleo asalariado registrado en el sector privado. Los resultados muestran evidencia en favor de la hipótesis planteada: las AEL de mayor recuperabilidad están especializadas en actividades procíclicas, como las extractivas de recursos no renovables y el turismo.
    Keywords: Resiliencia; Recuperación Económica; Empleo; Especialización de la Producción; Estructura Industrial; Geografía Económica; Argentina; 1996-2015;
    Date: 2022–05
  8. By: Kay, Rosemarie; Kranzusch, Peter; Nielen, Sebastian; Suprinovič, Olga
    Abstract: Die vorliegende Studie untersucht Merkmale erfolgreicher regionaler Gründungsökosysteme. Berücksichtigt werden sowohl gewerbliche als auch freiberufliche Existenzgründungen im Zeitraum 2017 bis 2019. Als regionale Einheit werden die (401) Kreise und kreisfreien Städte in Deutschland betrachtet. Eine gute Verkehrs- und Telekommunikationsinfrastruktur, eine hohe Bevölkerungsdichte und eine gute Ausstattung mit sozialen Ressourcen erweisen sich als prägende Merkmale eines Gründungsökosystems mit hoher Gründungsneigung in der Bevölkerung. Sie sind meist, aber nicht nur in den städtisch geprägten Regionen vorzufinden. In mindestens 11 ländlich geprägten Regionen ist die Gründungsneigung überdurchschnittlich hoch.
    Keywords: Gründungsökosystem,Regionales Gründungsgeschehen,Deutschland,Entrepreneurial ecosystem,Regional start-up activity,Germany
    JEL: L26 O10 R11
    Date: 2022

This nep-geo issue is ©2022 by Andreas Koch. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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